Role of ITTO FLEGT Independent Market Monitoring Rupert Oliver

Lead Consultant

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FLEGT Independent Market Monitoring (IMM)

• Required by FLEGT VPAs for impact assessment & annual reporting

• Funded by EU through EC DEVCO

• Budget: €4.4 million over 5 years (2014-2018)

• Hosted by ITTO

• Documented methodology

• 53 draft indicators for quantitative assessment – e.g. trade & investment flows, prices

• Participatory & publicly available

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IMM Progress

• Baseline report – 1st review draft end November 2014, final report available Jan/February 2015

• VPA Partner Countries in international & EU trade 2004 to 2014

• Identify & preliminary review of factors driving change

• Liaison with VPA Partners – participation at Liberia JIC & Ghana JMRM in May/June 2014, workshops Indonesian Ministry of Forestry in November 2014, Cameroon/Congo Republic 1st Qtr of 2015

• First Advisory Committee meeting planned 1st Qtr 2015 (likely Brussels)

• ITTO, FAO, UN-ECE, Eurostat, EFI, government agencies from EU & VPA Partner countries, trade associations, other organisations interested in timber market monitoring

• Preliminary negotiations with potential members of IMM Correspondents Network

• Regular contact with market participants and trend monitoring

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Improved access to statistics

• Responding to regular requests for trade statistics

• Supporting redevelopment of EFI Forest Products Trade Flow Database • Based on global COMTRADE & EU

COMEXT data

• HS Chapters 44 (Wood), 47 (Pulp), 48 (Paper), 49 (Printed papers), 94 (Furniture)

• Validated - comparing unit values & mirror export/import data

• Publicly available

• Data visualisation

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FLEGT VPA Partners

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• Indonesia legality system operating on a pilot basis since January 2013 • Ghana expecting first licensed deliveries in 2015 • Malaysia could quickly deliver licensed timber if political issues were resolved

FLEGT VPA Partners in international trade

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Source: IMM analysis of Global Trade Atlas & UN COMTRADE

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Source: IMM analysis of Global Trade Atlas & UN COMTRADE

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Source: IMM analysis of Global Trade Atlas & UN COMTRADE

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Source: IMM analysis of Global Trade Atlas & UN COMTRADE

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Source: IMM analysis of Global Trade Atlas & UN COMTRADE

FLEGT VPA Partners in EU trade

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Source: IMM analysis of Eurostat COMEXT

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Eurostat construction production index 2010=100

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A Perfect Storm: drivers of tropical hardwood market decline

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Market impact of the EUTR on tropical wood?

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EU Member State imports of tropical hardwood Monthly value (rolling) May 2012 to June 2014 € million

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Concluding comments

• Significant gaps in information • Limited availability & poor quality of production and trade data

• Systematic assessments illegality risks for specific countries/regions/products

• Data on flows of certified/verified legal timber.

• Trade data yet to reveal significant direct trade impact of EUTR

• Other commercial factors more in evidence

• Different interpretations – DDS working? Effective forest regulation? EUTR ineffective?

• Decline in relative role of EU in tropical trade (short term?) reinforces importance of collective action on consumer side

• VPA wide international coverage - critical mechanism for EU engagement in tropical countries - foundation for tropical wood market development

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Thank you! IMM brochure available www.itto.int/imm Rupert Oliver

imm@itto.int

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